Oklahoma City’s Devon Energy announced Wednesday it has sold its Canadian operations in a $2.8 billion deal with Canadian Natural Resources Limited.
The company said the transaction was still subject to customary terms and conditions and is expected to close by the end of the second quarter of 2019. Proceeds will be used by Devon for its debt reduction.
“The sale of Canada is an important step in executing Devon’s transformation to a U.S. oil growth business,” said Dave Hager, president and CEO. “This transaction creates value for our shareholders by achieving a clean and timely exit from Canada, while accelerating efforts to focus exclusively on our high-return U.S. oil portfolio.
“I would like to express my sincere appreciation to all of our Canadian employees for their hard work and dedication over the past two decades in building an industry-leading heavy oil business,” said Hager. “With this change in ownership, it is great to see our talented and innovative employee base transition to a top-tier company like Canadian Natural Resources.”
The company’s Canadian asset portfolio consists of heavy oil assets principally located in the province of Alberta, with net production averaging 113,000 oil-equivalent barrels in the first quarter of 2019. At year-end 2018, proved reserves associated with these properties amounted to approximately 409 million barrels of oil. Field-level cash flow accompanying these assets, which excludes overhead costs, totaled $236 million in 2018.
To complete the company’s transformation to a high-return U.S. oil growth business, Devon continues to advance the divestiture process for its Barnett Shale gas assets in north Texas. Data rooms for the Barnett will open in the second quarter of 2019 and the company expects to exit the assets by the end of 2019.